Education secrets of the rich

There is a strong argument to be made that Nathan Tinkler is on the greatest moneymaking run in living memory.

Consider the facts. In November 2006 – less than four years ago – he buys a coal mine for $30 million, after stumping up $1 million of his own money. In June 2007, he sells the mine to Macarthur Coal for $265 million, taking the bulk of $200 million cut in Macarthur shares. In May 2008, he sells those shares for $445 million. Then he buys the Maules Creek deposit for $480 million in mid-2009, before floating it earlier this year for $1.2 million.

In less than four years, his fortune has gone from less than $1 million to $600 million.

What makes Tinkler’s story so incredible is that he has no formal business training. In fact, Tinkler failed to pass his High School Certificate while at school in Inverell, finishing with a ranking in the bottom third of the state.

But as Tinkler told the Australian Financial Review last week, he hates it when people describe him as a “lucky idiot”.

“That really shifts me. I was always driven… the routine and structured environment just didn’t agree with me.”

Who could argue? Tinkler clearly has an inbuilt feel for asset values, a great sense of timing and, by all reports, an innate knowledge of geology.

All of which raises a pretty good question – does a tertiary education actually help you on the path to wealth?

It’s an issue that rich list followers have debated for many years. Research into the BRW Rich 200 done a few years ago suggested the majority of list members had not attended university, and only 40% of the members of the Young Rich list were tertiary educated.

That seems to have changed in recent years, perhaps as the list gets slightly younger. My very quick scan of the 30 richest people in Australia suggests 16 went to university, while 14 finished their education at or before the end of high school.

Tinkler’s level of education is actually not that unusual among members of the Rich 200. Billionaires including James Packer, Kerry Stokes and Lindsay Fox did not attend university, and Stokes and Fox did not actually complete high school.

In fact, there are plenty of rather unique education stories among the top 30, including:

• Sydney apartment king Harry Triguboff graduated from Leeds University with a degree in textiles.
• Billionaire regional media mogul Bruce Gordon left school at the age of 14 and went to work on the stage as a vaudeville performer.
• Mining magnate Clive Palmer (who also had a career in property) studied journalism at the University of Queensland. Not surprisingly, this qualification appears to have little impact on the building of his fortune.
• Platinum Asset Management chief Kerr Neilson studied at the University of Cape Town, but managed other people’s money on the side at a part-time job at a trust company.
• James Packer went straight from high school Cranbrook to an outback cattle station, where he learned how to be a jackaroo. His father Kerry famously dismissed university by saying: “Why would he want to go there? To learn how to smoke marijuana?”
• Retail king Gerry Harvey left school at the age of 15, but later went back after securing a scholarship. He then went on to study commerce at the University of Sydney, while holding down a job in a bank. However, Harvey apparently hated uni and quickly quit to become a door-to-door vacuum salesman.
• Trucking billionaire Lindsay Fox was asked to leave Melbourne High School due to his rather poor academic record. A teacher would later say Fox was “an excellent student, but the teachers didn’t know what to teach him.”
• Seven Network boss Kerry Stokes left school at the age of 14, partly because his parents could no longer afford to pay. He would go on to work as a shearer and a television antenna installer. In his 30s he was diagnosed with dyslexia.
• Visy Group head Anthony Pratt studied at Melbourne’s Monash University, earning a Bachelor of Economics before joining consulting firm McKinsey.

The above examples – and that of Tinkler – suggest there is no single educational path that an aspiring rich list member should take.

While some billionaires will use their university degrees all their life – such as financial services giant Kerr Nielsen and his commerce degree, or mining billionaire Chris Wallin and his geology qualifications – for others, secondary and tertiary education will simply be a stepping stone to other things.

In today’s society, there are unlikely to be many future entrepreneurs who follow in the footsteps of Stokes and Fox and fail to complete secondary school, but there is little doubt that young people with a burning passion for business will skip university to immediately try their hand at running a business.

And who is to say this isn’t a valid wealth creation strategy? Because if you asked every member of the rich list, they would also say there is simply no substitute for the best teacher of all – losing money.